Lago Agrio: Chevron Settles With H5

Posted on September 10, 2015

Chevron has settled yet another claim against a business that was associated with the Lago Agrio plaintiffs and their lawsuit in Ecuador. H5 was an e-discovery and litigation services firm that owned a small percentage interest in the Ecuadoran judgment. No cash changed hands, but H5 transferred its interest in the judgment to Chevron and agreed not to participate further in the Lago Agrio case.
It’s unclear from the settlement agreement precisely what H5 is alleged to have done wrong. It’s concerning that a mere e-discovery vendor would get caught up in this. H5 is hardly in the same position as, say, Stratus Consulting. I previously asked if there was something unseemly about the settlement with Patton Boggs, and I have the same feeling here given what seems—at least based on what is publicly known—to be a kind of overreach that could have systemic bad effects on the ability of plaintiffs in major cases to find qualified litigation support.

2 Comments

Like you, I don’t know what potential claim Chevron might have had against H5. And since the settlement bars Chevron from making any public comments disparaging of H5, neither of us is likely to find out. But if Chevron’s potential claims against H5 had been frivolous, it seems to me unlikely H5 would have settled.

More broadly, I don’t see how the publicly known facts here support your stated concern that possible overreaching by Chevron might have “systemic bad effects on the ability of plaintiffs in major cases to find qualified litigation support.” First of all, we don’t know whether there was any overreaching here, because we don’t know what potential claims Chevron had against H5. (Granted, you did qualify your concern by stating, “at least based on what is publicly known.”)

In contrast to H5, in the case of Patton Boggs, Chevron’s claims — that Patton Boggs’ lawyers were involved in fraud — were made public. So, too, was at least some evidence that tends to support Chevron’s claims. For example, Burford Capital LLC CEO Christopher Bogart accused Patton Boggs of making “false and misleading” statements, on which Burford relied in deciding to fund the Lago Agrio lawsuit (Burford later ended its funding when it learned of plaintiffs’ counsel’s fraud).

I don’t know whether Patton Boggs lawyers committed fraud; as far as I know, the matter has not been adjudicated and was settled. But if Chevron reasonably believed that the law firm’s lawyers committed fraud, then how was it “overreaching” for Chevron to sue Patton Boggs, and for Chevron and Patton Boggs then to settle that suit?

In principle, of course, I share the concern that deserving plaintiffs not be impeded from obtaining first-rate litigation assistance, as a consequence of law firms and support firms having to fear being sued for providing legitimate assistance. If Chevron (or other large companies) were to file or threaten unfounded suits against law firms and litigation support firms, that could do serious harm to plaintiffs’ ability to secure effective access to justice.

Your point, then, is well-taken in theory. But I just don’t see that it applies to the facts here, to the extent they are publicly known.

I guess my point was that I thought the claim against Patton Boggs was concerning, and my concerns are heightened here, since, for example, one can hardly imagine a third party relying on representations from a litigation support firm in making investment decisions! It’s just not clear to me what the claims could be, and the appearance is that merely doing business with the LAPs is enough to bring down the hammer.

Speaking of hammers, you say that if the claims were frivolous it’s difficult imagining H5 settling. I don’t know about frivolous, but even on weak claims, it’s very easy to imagine H5 settling. Why not jump on the bandwagon and save yourself the massive expense of litigation against Chevron in return for a stake in a judgment that has an uncertain value at best? Unlike a law firm, a vendor, as far as I know, has no duty of loyalty to its clients, or rather customers.

Please check here to show that you agree that Letters Blogatory may store your comment, name, email address, and your website URL if you provide it, indefinitely for the purpose of publishing your comment on this website. *